Does an LLC Have to Have a President or CEO?

By Brette Sember, J.D.

Does an LLC Have to Have a President or CEO?

By Brette Sember, J.D.

An LLC (limited liability company) can be a convenient and easy way to structure your business, whether it is a sole proprietorship or a partnership. LLCs do not require a a president, a CEO, or a board of directors. The members of an LLC, however, have the option of choosing a president, a CEO, or managers.

Businesspeople talking around table

LLC Members

LLC members are the people who own the company. Members generally provide the financial investment to get an LLC started, but they may also offer real estate or professional services for their membership stake. Members receive a portion of the profit that the LLC earns, which is taxed at their own individual rate.

As the owners, the members have ultimate control over the way the business is formed and organized. When an LLC is created, most states require the LLC to disclose whether the members will be managing the day-to-day business of the LLC themselves.

LLC Managers

The LLC members can choose to act as the managers of the LLC themselves (a "member-managed LLC"). In this structure, often the simplest, the members jointly run the business. The LLC can also choose to hire managers to run the business (a "manager-managed LLC"). If managers are hired, they are usually hired as salaried employees without ownership rights. However, if the members prefer, one or more LLC members can be hired instead as managers and receive a salary, member profits—or both.

A manager can be given the title of CEO or president, if the members wish it. If managers are hired to handle the day-to-day business of the LLC, most states require the LLC to disclose the name, address, and title of the managers—whether they are members or employees—to the state in their articles of organization.

Responsibilities of LLC Managers

There are no requirements for the role of an LLC manager. It's up to the LLC members to decide whether they want to hire managers, and if so how many, and what role and responsibilities those managers will take on.

When an LLC hires managers, the best practice is to create an operating agreement that lays out exactly how the LLC will be managed. The operating agreement designates what kinds of decisions the LLC managers will make and what their responsibilities will be. An operating agreement also specifies the types of decisions that must be made by a vote of the members. Some states require LLCs to have operating agreements, while in other states they are optional.

Hiring and Firing Managers

The LLC operating agreement generally will include the procedure for hiring and firing managers, which is typically done by a vote of the members. If the LLC does not have an operating agreement, the state LLC statutes include a procedure for hiring and firing managers that must be followed. In general, a majority vote of the LLC members is required to hire or fire managers.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.